Will the Rally Monkey Come Out Next Week?

Two weeks in a row with nothing but strong bullish advances – the question becomes whether it can continue this week. So far, the market has responded well to earnings season. Next week there will be more reports, and when yourself in the midst of earnings anything goes. One thing I was surprised to see last week was how well the market responded to the Microsoft (MSFT) earnings. Heading into this week, we are extremely overbought, and having hit the 9,000 mark in the Dow, could cause a lot of investors to want to take profits. If I’m a long-term investor, I would be hard-pressed to buy anything in a market this over-extended and I’m sure many others share my sentiment as well.

I’ve updated the Stock Screens and the Market Barometer for this week. My Barometer obviously shows the market in a full-fledge, raging-bull mode. The screens are showing still alot of oil stocks (like last week’s updates) but not near as many as in prior weeks. The industry that seems to be showing a lot of representation in the past week is the healthcare industry – I’m not sure if it has anything to do with Congress’ and Obama’s universal health-care push or not, but Drug Manufacturers, Drug Stores and Bio-Tech seems seem to be popping up the most.

As for the day-trades, I’m looking to rebound after last week’s not-so-great performance and get back on the rally-train. Should be an interesting week, the liklihood that the market can put together another week like the previous two, is a low probability, so if the market finishes the week with minimal losses, investors will probably applaud that – as for me, minimal losses are never acceptable, in fact they are abhorent – so don’t look for me to settle for any thing but positive gains.

HAPPY TRADING IN THE WEEK AHEAD!